Seeing Past the Pitch: Data-Driven Due Diligence for M&A

When you're preparing to acquire a new company, you need more than just spreadsheets and promises. You need the facts. The real market outlook. The competitive dynamics. The risks no one’s talking about.

At Freedonia Strategic Insights, we provide independent, data-driven due diligence that goes well beyond the numbers. Our team uncovers what’s really happening in the market so you can assess whether the target’s growth projections hold up or fall apart under scrutiny.

Here’s how one global manufacturer used our intelligence to make a smarter acquisition decision – and avoid a multimillion-dollar mistake.

Real-World Impact: Avoiding a Risky Acquisition in the Filtration Market

A leading manufacturer of industrial and consumer products identified a promising acquisition target in the global aftermarket filtration industry. The seller projected rapid growth and solid margins. But the client knew better than to take those claims at face value, especially with a tight four-week timeline to make a decision.

That’s when they turned to Freedonia.

The Challenge

Our client needed answers to several critical questions in a compressed timeframe:

• Market Validation – Were the target’s growth projections realistic?
• Path-to-Market Insight – Was the distribution model viable in every key region?
• Competitive Landscape – Who else was gaining ground, and how fast?
• Risk Identification – What outside forces could derail the market?

Our Approach

Freedonia’s team moved quickly but thoroughly. We applied a focused, global approach tailored to the industry and investment timeline:

• Primary Research – We conducted nearly 60 interviews with stakeholders across North America, Europe, Latin America and China, including aftermarket filter manufacturers, garages and distributors.
• Demand Forecasting – Our team analyzed current and future demand, factoring in regional vehicle usage trends, regulatory shifts, and the rise of alternatives like synthetic oils and EVs.
• Distribution Mapping – We examined how filters flowed through various regional channels to test the strength of the target’s access to market.
• Competitive Profiling – We built 12 detailed competitor profiles, revealing where the target was well-positioned – and where it wasn’t.

The Results

Freedonia’s insights changed the trajectory of the deal. Our client:

• Abandoned the Acquisition – Our research showed the target’s market outlook was significantly overstated, prompting the client to walk away.
• Saved Millions – By avoiding an overpriced acquisition, the client preserved capital for more promising opportunities.
• Sharpened Expansion Strategy – Our findings helped the client refine its broader growth plans and identify areas where it could gain share organically.

The Takeaway

When it comes to acquisitions, it pays to ask hard questions – and get honest answers.

Freedonia helps you move forward with confidence by validating market assumptions, exposing risk, and protecting your investment from costly surprises.

Want to make your next acquisition decision with clarity? Let’s talk due diligence. Check out how we support smarter deal-making on our website, follow us on LinkedIn, or schedule a time to connect with our experts.

About the Author: Lee Steinbock is Director at Freedonia Strategic Insights, where he leads a team of analysts who provide detailed market intelligence in support of strategic business planning. He earned an MBA from Weatherhead School of Management at Case Western Reserve University and a JD from Case Western Reserve University School of Law.